Pros and Cons of Appealing an IRS Audit

Filing an appeal, in the majority of cases, results in some savings -- but rarely a total victory.

There are three solid reasons for appealing an IRS tax audit (and two relatively insignificant reasons not to).

Appealing is simple and costs nothing, unless you use a tax pro (an accountant or tax attorney) -- which is not required.
Appealing can delay your audit tax bill for months, buying you time to raise cash or consider other payment options.
Appealing, in the majority of cases, results in some tax savings (although rarely a total victory).

The appeals officer can raise issues the auditor missed -- which could cost you more money -- but this almost never happens. However, if you are afraid that a particular item will be discovered and you'll owe a lot more in taxes, you can skip the appeal altogether and go directly to tax court, where new issues can't be raised. You should consult a tax pro before skipping the appeal process, though.
Interest on the tax bill continues to run while you are appealing, but this is usually a small item compared to the tax savings that are likely to result.

For helpful information on IRS audits, see Top Ten Tips for Appealing an IRS Audit.